Category: Energy

(This is the second part in a two-part series on Rep. Hal Rogers [R-Ky.]. Yesterday’s blog exposed Rep. Rogers and his back door earmarks through the Department of Defense) Yesterday, the Taxpayers Protection Alliance (read blog here) showed that Rep. Hal Rogers (R-Ky.) has found ways to funnel projects into his district despite Congress’ earmark ban. While the word “earmark” may have been struck from Washington’s vocabulary, it doesn’t mean the practice of “earmarking” money to a member’s district has ended. Like the military drip pan example from yesterday, this one also involves a company in Rogers’ district, this time a uranium enrichment plant. The United States Enrichment Corp. (USEC) has two facilities (one in Kentucky and one in Ohio) that were on the brink of failure without further government funding. To that end, as Energy and Environment News(subscription required) reported,USEC itself freely admitted to the Department of Energy (DOE) that it “was considering halting its enrichment operations at the plant later this year because it doesn’t have enough commercial business to warrant operations...” [Emphasis added]. The source of funding for a uranium enrichment facility may not attract much interest, but the issue deserves much attention and concern. At the heart of the matter is an attempt by Rep. Rogers to save roughly 1,200 jobs in his district by securing additional federal funding for the beleaguered plant. While he justifies his request by citing national security concerns, in reality these federal dollars will be used for commercialization for a product that the market – by the company’s own admission – has not demonstrated a need for at this time.

Usually when the government offers your hard-earned tax dollars to an energy company, the money goes to a start-up company in a “promising” industry. The logic, albeit flawed, is that the company requires only a minuscule amount of seed money to catapult it beyond the valley of death and make it commercially competitive in the marketplace. The fact of the matter is this sort of subsidy rarely works. Either the industry is hooked for life on government dollars or it fails and your tax dollars go down the drain with it. If subsidies were truly successful, the country would be filled with cars running on hydrogen. Even though Solyndra has received all the attention lately, don’t be fooled into thinking that the government only distributes subsidies to nascent industries. When it comes to distributing your tax dollars to pet interests, the government is an equal opportunity dispenser. And, by no means does it discriminate against those sectors that are already very profitable and have no need for government funds. Rest assured that the government spreads your wealth – that is rightly yours – among many industries. One of its favorites du jour is the natural gas industry.

Usually when the government offers your hard-earned tax dollars to an energy company, the money goes to a start-up company in a “promising” industry. The logic, albeit flawed, is that the company requires only a minuscule amount of seed money to catapult it beyond the valley of death and make it commercially competitive in the marketplace. The fact of the matter is this sort of subsidy rarely works. Either the industry is hooked for life on government dollars or it fails and your tax dollars go down the drain with it. If subsidies were truly successful, the country would be filled with cars running on hydrogen. Even though Solyndra has received all the attention lately, don’t be fooled into thinking that the government only distributes subsidies to nascent industries. When it comes to distributing your tax dollars to pet interests, the government is an equal opportunity dispenser. And, by no means does it discriminate against those sectors that are already very profitable and have no need for government funds. Rest assured that the government spreads your wealth – that is rightly yours – among many industries. One of its favorites du jour is the natural gas industry.

This Tax Day, the federal government expects to rake in $945 billion in individual income tax payments from U.S. taxpayers. According to the Tax Foundation, the average American worked 32 days last year just to pay their income tax bill from Uncle Sam, and that doesn’t even include federal Social Security, Medicare or unemployment insurance programs, or any state or local tax burdens. As taxpayers across the nation rush to calculate their share of taxes and say a final goodbye to some of their hard-earned dollars, the same question crosses the minds of many Americans: “What is the government doing with all of this money?” Unfortunately, the answer is rarely anything useful, responsible, necessary, constitutional, valuable or meaningful. With many states mandated to balance their budgets and many state legislatures reluctant to cut wasteful government spending, states and localities have recently begun going after the popular and fast-growing digital goods industry ("apps", song and movie downloads, and eBooks) as a source of new tax-revenue for their coffers. The United States needs a national framework that would prevent consumers from being taxed more than once. This means more clarity for states and more protection for consumers. So, in honor of tax day, The Taxpayers Protection Alliance has identified 10 outrageous federal expenditures that cost taxpayers dearly, while providing little benefit in return.

Part of the two month extension of the payroll tax cut package late last year was a requirement that the President make a decision on the Keystone XL Pipeline. On Wednesday January 18, the White House officially announced that it will not seek to build the pipeline. According to Politico, “The State Department Wednesday will reject the Keystone XL pipeline, multiple sources following the project tell POLITICO.” The formal announcement by the State Department is expected to occur at 3 pm. The White House did leave a little bit of wiggle room. According to The Hill, “While the administration is expected to reject TransCanada Corp.’s permit application, it will allow the company to re-apply…” This could be seen as keeping the door open to the pipeline when in reality it is probably just a ploy to try and “have it both ways.” The truth is that the XL Pipeline will be good for the economy, the government, and the entire country. It is important to understand the facts about the pipeline. The proposed pipeline, which would carry roughly 700,000 barrels of oil per day from Alberta, Canada, to refineries on the Gulf Coast, would encompass 1,700 miles and cost approximately $7 billion. The pipeline would be an extension of one that became operational in 2010 (you can read TPA’s previous blog posting here).

President Obama and Defense Secretary Leon Panetta announced a new Defense strategy on January 5, 2012. The new strategy involves hundreds of billions of dollars in cuts. The mysteries in these cuts are the specifics. According to the Austin Business Journal, “President Barack Obama and Defense Secretary Leon Panetta gave few specifics about program cuts at the U.S. Department of Defense [DOD] during a briefing Thursday on DOD’s strategy…” This is problematic because as much as the Pentagon budget needs to be cut, it should be done responsibly with the Pentagon still having the ability to meet the defense needs of the country. In addition to the Defense cuts, President Obama should also require all federal agencies to do the same and come up with target cuts.

There has been quite a bit of debate about the Keystone XL Pipeline with one side calling for its construction and the other side trying to make sure that it is never built. In early November President Obama put a halt to the pipeline and the State Department indicated that they wouldn’t make a decision until 2013, well after the 2012 elections. The truth is that the XL Pipeline will be good for the economy, the government, and the entire country. First, it is important to understand the facts about the pipeline. The proposed pipeline, which would carry roughly 700,000 barrels of oil per day from Alberta, Canada, to refineries on the Gulf Coast, would encompass 1,700 miles and cost approximately $7 billion. The pipeline would be an extension of one that became operational in 2010.